Czech Republic: Manufacturing PMI improves at fastest pace in two years in October
The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, increased from 50.7 in September to 51.9 in October, marking the best reading since October 2018. Therefore, the index moved further above the critical 50-threshold separating deterioration from improvement in the health of the manufacturing sector.
October’s print largely reflected a stronger expansion in new orders and the first expansion in workforce numbers since February 2019. Moreover, output continued to increase, albeit only moderately, while exports orders rose at the fastest pace since June 2018. On the price front, input cost inflation intensified amid supply shortages and higher transport costs, while output charges fell again. Lastly, business sentiment cooled due to less upbeat demand projections.
Commenting on the release, Sian Jones, economist at HIS Markit, stated:
“The Czech manufacturing sector showed further signs of emerging from the depths of the pandemic-induced economic downturn in October. […] Margins continued to be squeezed though, as a sharp rise in cost burdens was met with yet another drop in output charges. Sustained efforts to boost sales amid challenging demand conditions also weighed on expectations, as firms expressed muted optimism due to COVID-19 related uncertainty.”
Commenting on the release, Sian Jones, economist at HIS Markit, stated:
“The Czech manufacturing sector showed further signs of emerging from the depths of the pandemic-induced economic downturn in October. […] Margins continued to be squeezed though, as a sharp rise in cost burdens was met with yet another drop in output charges. Sustained efforts to boost sales amid challenging demand conditions also weighed on expectations, as firms expressed muted optimism due to COVID-19 related uncertainty.”